What Is Laissez-Faire Management?

Laissez-faire, pronounced zì yóu fàng rèn, is an idiom meaning to leave it unchecked and let it develop freely.

[zì yóu fàng rèn]

Without restriction, let it develop freely.

Let go

Laissez-faire

The term was first used in the dictionary by peasantism in the 18th century to oppose government interference in trade. The term became synonymous with free market economics in the early and mid-19th century.

Laissez-faire economic theory is considered pure and economic

In the United States, President Reagan called his plan "new federalism," reducing spending on social welfare programs, reducing regulation of industries, and privatizing public services. However, Reagan did not fully comply with the "laissez-faire" policy, especially in terms of trade. For several years, he imposed a limit on the import of Japanese cars to protect the US automobile industry and employees.

Most modern industrial nations have not thoroughly adopted the principle of laissez-faire, and usually still have some government intervention in the economy. These interventions include minimum wages, corporate welfare policies to assist some industries in the country,

Since both laissez-faire and free markets are quite idealistic ideas, critics have also criticized them, criticizing these idealized market economics theory in the real world is not applicable. Some critics have also criticized laissez-faire theory of property rights, criticizing it for having an inappropriate bias against private interests over public interests. Critics believe that the market adjustment mechanism cannot properly handle market failures, and therefore requires a central government or mechanism to manage it. Critics believe that laissez-faire is merely an ideological decoration that masks regional protectionism and typical conservative politics behind it, and criticizes laissez-faire for economic expansionism (or economic imperialism) controlled by elites ).

Some criticisms of market failures are:

· Markets that are not subject to government intervention will lead to monopolies. The most frequently cited example is standard petroleum. However, it should be noted that when Standard Oil was charged with monopoly, there were more than 100 competing oil refiners in the market, and when the trial results in 1911 led to government intervention, Standard Oil s market share had already changed from 1890 88% at the time of the charge fell to 64%.

Unregulated markets will generate fraud like Enron. However, laissez-faire does not advocate "no supervision." Under the laissez-faire system, fraud is illegal, and the government should step in to prevent fraud. Laissez-faire does not mean that there is no regulation, but that regulation should be limited to protecting individuals from fraud and violence.